TY - JOUR
AU - Mehra,Rajnish
TI - The Equity Premium in India
JF - National Bureau of Economic Research Working Paper Series
VL - No. 12434
PY - 2006
Y2 - August 2006
DO - 10.3386/w12434
UR - http://www.nber.org/papers/w12434
L1 - http://www.nber.org/papers/w12434.pdf
N1 - Author contact info:
Rajnish Mehra
Department of Economics
W. P. Carey School of Business
Arizona State University
PO Box 879801
Tempe, AZ 85287-9801
Tel: 480 965-6335
Fax: 480 965-0748
E-Mail: rajnish.mehra@asu.edu
AB - In this article we examine the Equity Premium in the Indian context and review the related literature. The equity premium is the returned earned by a well-diversified stock portfolio in excess of that earned by a risk free security such as a Treasury Bill. Consistent with U.S. experience we find that the Indian equity premium has been quite high in the post 1991 period, averaging 9.7% above the corresponding risk free security. It is difficult to justify such a premium based on theoretical considerations.
The article is an entry prepared for the Oxford Companion to Economics in India edited by Kaushik Basu
ER -